Business Schools: A Failing Grade on Ethics

The time for teaching analysis of ethical problems is over. Students must be given the tools to act decisively when it's easier to run with the crowd

By Mary C. Gentile, PhD

Mary C. Gentile, PhD

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Whether you were among those who lauded the clarity of President Barack Obama's recent inaugural address, or those who bemoaned the lack of "quotable quotes," most listeners heard his call for an "era of responsibility" loud and clear. In fact, when he turned to the topic uppermost on our minds—the economic downturn—he plainly stated that our current woes are the result not only of "greed and irresponsibility on the part of some," but also, and more importantly for our path out of this mess, the "collective failure to make hard choices" by the rest of us. Interestingly, this analysis is the blueprint for redressing what has gone wrong in business education over the past decades.

The current credit-market meltdown and governance misbehavior has, once again, triggered conversations among business educators and the business press asking "Just what are they teaching in business schools?" After all, you don't have to look far to find a lot of MBAs doing the much scorned "perp walk." Even more disconcerting are all those business school graduates who may not have crossed the legal line but have presided over, or at least given silent assent to, a stream of decisions that have led to the current collapsing dominoes in the worldwide financial condition.

Two Inadequate Approaches

What will be disappointing, however, and what we simply cannot afford, is for business education to respond to this internal and external critique in the same way we have responded to scandals in the past. That is, to merely bemoan the problem of a "few bad apples" and then focus on preparing future business leaders to develop awareness of the kinds of ethical breaches they might encounter in their careers—presumably so they can recognize them in time to choose not to work for those bad actors and thereby avoid the problem.

Or business education may take the other most common approach: that is, to focus on the difficulty of reasoning our way through knotty and challenging ethical dilemmas where the questions are not black and white but many shades of grey. Accordingly, business ethics courses are developed to teach the analytics and ethical reasoning models that philosophers have probed for centuries: duty-based decision-making, rights-based decision-making, and utilitarian decision-making.

The first approach is about awareness and avoidance. The second is about analysis. But neither is an adequate response, not if the goal is to equip a generation of business leaders with the tools to take decisive action when confronted with the kind of questionable decision-making that led to the current financial mess. What we really need now is preparation and practice for action, and not just any action but a particular kind of hard, often risky, intricate values-based action.